IDEAS home Printed from https://ideas.repec.org/p/gre/wpaper/2018-28.html
   My bibliography  Save this paper

Hayek on Expectations: The Interplay between Two Complex Systems

Author

Listed:
  • Agnès Festré

    (Université Côte d'Azur, CNRS, GREDEG, France)

Abstract

In this paper, we argue that Hayek's approach to expectations can be better understood if one takes into account the interplay between two related complex evolving systems: the cognitive system and the system of behavioural rules of action. The interplay between these two systems involves both positive and negative feedback mechanisms so that an individual system of rules can produce higher order regularities that preserve their existence over time. Our contribution complements existing work on Hayek's cognitive theory by providing insights on how Hayek's approach to expectations can inform modern behavioural economics.

Suggested Citation

  • Agnès Festré, 2018. "Hayek on Expectations: The Interplay between Two Complex Systems," GREDEG Working Papers 2018-28, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    • Handle: RePEc:gre:wpaper:2018-28
    as

    Download full text from publisher

    File URL: http://195.220.198.217/GREDEG-WP-2018-28.pdf
    File Function: First version, 2018
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. J. Barkley Rosser Jr. (ed.), 2009. "Handbook of Research on Complexity," Books, Edward Elgar Publishing, number 3625.
    2. Mikhail Anufriev & Cars Hommes & Raoul Philipse, 2013. "Evolutionary selection of expectations in positive and negative feedback markets," Journal of Evolutionary Economics, Springer, vol. 23(3), pages 663-688, July.
    3. Boettke, Peter J, 2002. "Information and Knowledge: Austrian Economics in Search of its Uniqueness," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 15(4), pages 263-274, December.
    4. Hommes,Cars, 2015. "Behavioral Rationality and Heterogeneous Expectations in Complex Economic Systems," Cambridge Books, Cambridge University Press, number 9781107564978.
    5. Hayek, F. A., 2012. "Hayek on Hayek," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226321202 edited by Kresge, Stephen & Wenar, Leif, September.
    6. Bruce Caldwell, 2004. "Some Reflections on F.A. Hayek's The Sensory Order," Journal of Bioeconomics, Springer, vol. 6(3), pages 239-254, October.
    7. Peter Boettke & J. Robert Subrick, 2001. "From the philosophy of mind to the philosophy of the market," Journal of Economic Methodology, Taylor & Francis Journals, vol. 9(1), pages 53-64.
    8. Lewis, Paul, 2012. "Emergent properties in the work of Friedrich Hayek," Journal of Economic Behavior & Organization, Elsevier, vol. 82(2), pages 368-378.
    9. Cass R. Sunstein & Richard H. Thaler, 2003. "Libertarian paternalism is not an oxymoron," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 48(Jun).
    10. Agnès Festré & Pierre Garrouste, 2009. "The economic analysis of social norms: A reappraisal of Hayek’s legacy," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 22(3), pages 259-279, September.
    11. J. Barkley Rosser, 1999. "On the Complexities of Complex Economic Dynamics," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 169-192, Fall.
    12. Richard Arena & Agnès Festré, 2006. "Knowledge and Beliefs in Economics: The Case of the Austrian Tradition," Chapters, in: Richard Arena & Agnès Festré (ed.), Knowledge, Beliefs and Economics, chapter 3, Edward Elgar Publishing.
    13. repec:ucp:bkecon:9780226320625 is not listed on IDEAS
    14. Sims, Christopher A., 2003. "Implications of rational inattention," Journal of Monetary Economics, Elsevier, vol. 50(3), pages 665-690, April.
    15. Bruce Caldwell, 1997. "Hayek and Socialism," Journal of Economic Literature, American Economic Association, vol. 35(4), pages 1856-1890, December.
    16. Richard H. Thaler & Cass R. Sunstein, 2023. "Libertarian paternalism," Chapters, in: Cass R. Sunstein & Lucia A. Reisch (ed.), Research Handbook on Nudges and Society, chapter 1, pages 10-16, Edward Elgar Publishing.
    17. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    18. William Butos & Roger Koppl, 1993. "Hayekian expectations: Theory and empirical applications," Constitutional Political Economy, Springer, vol. 4(3), pages 303-329, September.
    19. Koppl, Roger, 2010. "Some epistemological implications of economic complexity," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 859-872, December.
    20. Evelyn Gick & Wolfgang Gick, 2001. "F.A. Hayek’s theory of mind and theory of cultural evolution revisited: Toward and integrated perspective," Mind & Society: Cognitive Studies in Economics and Social Sciences, Springer;Fondazione Rosselli, vol. 2(1), pages 149-162, March.
    21. Hayek, F. A., . "Money, Capital, and Fluctuations," University of Chicago Press Economics Books, University of Chicago Press, number 9780226321271 edited by McCloughry, R. K., September.
    22. Hayek, F. A. & Vanberg, Viktor J., 2017. "The Sensory Order and Other Writings on the Foundations of Theoretical Psychology," University of Chicago Press Economics Books, University of Chicago Press, number 9780226436425 edited by Vanberg, Viktor J., September.
    23. Birner, J., 1995. "The surprising place of cognitive psychology in the work of F.A. Hayek," Research Memorandum 019, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    24. Christopher A. Sims, 2006. "Rational Inattention: Beyond the Linear-Quadratic Case," American Economic Review, American Economic Association, vol. 96(2), pages 158-163, May.
    25. Ludwig M.P. van den Hauwe, 2011. "Hayek, Gödel, and the case for methodological dualism," Journal of Economic Methodology, Taylor & Francis Journals, vol. 18(4), pages 387-407, December.
    26. Caldwell, Bruce, 2000. "The Emergence of Hayek's Ideas on Cultural Evolution," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 13(1), pages 5-22, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thierry Aimar, 2008. "Self-ignorance: Towards an extension of the Austrian paradigm," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 21(1), pages 23-43, March.
    2. Vicente Moreno‐Casas & Philipp Bagus, 2022. "Dynamic efficiency and economic complexity," Economic Affairs, Wiley Blackwell, vol. 42(1), pages 115-134, February.
    3. Guy Meunier & Ingmar Schumacher, 2020. "The importance of considering optimal government policy when social norms matter for the private provision of public goods," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(3), pages 630-655, June.
    4. Katharina Momsen & Sebastian O. Schneider, 2022. "Motivated Reasoning, Information Avoidance, and Default Bias," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2022_03, Max Planck Institute for Research on Collective Goods.
    5. Agnès Festré & Pierre Garrouste, 2015. "The ‘Economics of Attention’: A History of Economic Thought Perspective," Post-Print halshs-02314240, HAL.
    6. Agliari, Anna & Naimzada, Ahmad & Pecora, Nicolò, 2018. "Boom-bust dynamics in a stock market participation model with heterogeneous traders," Journal of Economic Dynamics and Control, Elsevier, vol. 91(C), pages 458-468.
    7. Michael G. Pollitt & Irina Shaorshadze, 2013. "The role of behavioural economics in energy and climate policy," Chapters, in: Roger Fouquet (ed.), Handbook on Energy and Climate Change, chapter 24, pages 523-546, Edward Elgar Publishing.
    8. Ankinée Kirakozian, 2016. "One Without The Other? Behavioural And Incentive Policies For Household Waste Management," Journal of Economic Surveys, Wiley Blackwell, vol. 30(3), pages 526-551, July.
    9. Mariska van Essen & Tom Thomas & Eric van Berkum & Caspar Chorus, 2020. "Travelers’ compliance with social routing advice: evidence from SP and RP experiments," Transportation, Springer, vol. 47(3), pages 1047-1070, June.
    10. Dolan, Paul & Galizzi, Matteo M., 2015. "Like ripples on a pond: Behavioral spillovers and their implications for research and policy," Journal of Economic Psychology, Elsevier, vol. 47(C), pages 1-16.
    11. Elias L. Khalil, 2010. "Adam Smith’S Concept Of Self‐Command As A Solution To Dynamic Inconsistency And The Commitment Problem," Economic Inquiry, Western Economic Association International, vol. 48(1), pages 177-191, January.
    12. Kaufmann, Cornel & Müller, Tobias & Hefti, Andreas & Boes, Stefan, 2018. "Does personalized information improve health plan choices when individuals are distracted?," Journal of Economic Behavior & Organization, Elsevier, vol. 149(C), pages 197-214.
    13. Thieme, Lutz & Winkelhake, Olaf, 2018. "Zur Wirkung moralischer Appelle als Nudging? Ergebnisse aus verhaltensökonomischen Experimenten," Working Papers of the European Institute for Socioeconomics 22, European Institute for Socioeconomics (EIS), Saarbrücken.
    14. Hoffmann, Andreas & Urbansky, Björn, 2012. "Order, displacements and recurring financial crises," Working Papers 108, University of Leipzig, Faculty of Economics and Management Science.
    15. J. Barkley Rosser, 2014. "Natural Selection versus Emergent Self-Organization in Evolutionary Political Economy," Advances in Austrian Economics, in: Entangled Political Economy, volume 18, pages 67-91, Emerald Group Publishing Limited.
    16. Roberta Patalano, 2012. "Imagination and Perception as Gateways to Knowledge: The Unexplored Affinity between Boulding and Hayek," Chapters, in: Richard Arena & Agnès Festré & Nathalie Lazaric (ed.), Handbook of Knowledge and Economics, chapter 6, Edward Elgar Publishing.
    17. Upravitelev, A., 2023. "Neoclassical roots of behavioral economics," Journal of the New Economic Association, New Economic Association, vol. 58(1), pages 110-140.
    18. Paul Lewis, 2017. "The Ostroms and Hayek as Theorists of Complex Adaptive Systems: Commonality and Complementarity," Advances in Austrian Economics, in: The Austrian and Bloomington Schools of Political Economy, volume 22, pages 35-66, Emerald Group Publishing Limited.
    19. Becchetti, Leonardo & Salustri, Francesco & Scaramozzino, Pasquale, 2020. "Nudging and corporate environmental responsibility: A natural field experiment," Food Policy, Elsevier, vol. 97(C).
    20. Joseph E. Stiglitz, 2017. "The overselling of globalization," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 52(3), pages 129-137, July.

    More about this item

    Keywords

    Hayek; emergence; knowledge; expectations;
    All these keywords.

    JEL classification:

    • B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian; Stockholm School
    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gre:wpaper:2018-28. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Patrice Bougette (email available below). General contact details of provider: https://edirc.repec.org/data/credcfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.